Hinduja Global Solutions (HGS) hit an upper circuit of 5% at Rs 3235.85 after the company said that it has entered into definitive agreements to divest its healthcare services business to funds affiliated with Baring Private Equity Asia (BPEA).
The transaction based on enterprise value of $1,200 million, subject to closing adjustments, is expected to complete within 90 days, subject to shareholder and other regulatory approvals.
BPEA is one of Asia's largest private alternative investment firms, with assets under management of $23 billion. BPEA manages a private equity investment program, sponsoring buyouts and providing growth capital to companies for expansion or acquisitions with a particular focus on the Asia Pacific region, as well as dedicated funds focused on private real estate and private credit.
HGS' Healthcare Services business supports payer, providers, laboratories, durable medical equipment firms and pharmaceutical companies with solutions that augment clients' healthcare teams to deliver better patient, member, business and financial outcomes.
The services cover the entire lifecycle of a payer organization, including member acquisition, enrollment & billing, benefit set-up, claims adjudication, provider credentialing & data management, payment integrity & financial recovery, grievance & appeals, provider & member engagement, prior authorizations, case management and population health management, and the various functions in the revenue cycle of a provider organization.
The healthcare services vertical has over 20,000 employees across four geographies - India, the Philippines, the US and Jamaica - and recorded revenues of approximately $400 million in FY2021. Post completion of the transaction, HGS will transfer all client contracts, employees, and assets, including infrastructure related to the healthcare services business.
HGS will focus on strengthening its consumer engagement solutions (CES), HGS Digital and HRO/ Payroll businesses that support several top global brands across its nine verticals. Services to healthcare clients delivered by the HGS Digital and HRO/ Payroll businesses will continue to be part of HGS' portfolio.
Partha DeSarkar, Global CEO, HGS, said: "Our healthcare services business has steadily grown over the years. We reached a stage where we could recommend to promoter to divest stake in this business to unlock value for all HGS stakeholders. We will use the generated funds to strategically invest for the future growth of the organization. We see a long-term value and benefit to HGS in doing so. HGS will continue to focus on aggressively expanding its CES and Digital businesses in line with our goal to transform itself into a 'digitally-enabled customer experience (CX) company."
Meanwhile, Hinduja Global Solutions announced its earnings for the quarter ended 30 June 2021 after market hours yesterday.
The company's consolidated net profit increased by 137.7% to Rs 117 crore in Q1 FY22 as against Rs 49.22 crore in Q1 FY21. Revenues from operations increased by 25.5% YoY to Rs 1550.5 crore during the quarter.
As compared with Q4 FY21, the company's net profit and revenue have declined by 10.2% and 0.8% respectively.
EBITDA improved by 59.2% to Rs 232.1 crore in Q1 FY22 compared with Rs 145.8 crore in Q1 FY21. EBITDA margin was at 15% as on 30 June 2021 as against 11.8% as on 30 June 2020.
Profit before tax in Q1 FY22 stood at Rs 164.2 crore, up by 117.5% from Rs 75.49 crore in Q1 FY21. Provision for taxation increased by 79.7% YoY to Rs 47.2 crore during the period under review.
Speaking on the results, Partha DeSarkar, executive director and global CEO of HGS, said: "Building on the momentum from last year, HGS has begun FY2022 on a strong note. Our performance in the first quarter was better than expected, with double-digit YoY growth in revenue, EBIDTA and PAT. The results were boosted by robust volumes in the Healthcare and UK businesses, and a resilient Work@Home-led delivery model.
Despite the ongoing pandemic-related challenges, the overall business environment has improved, and we are seeing strong demand for our services. We continue to win major deals across verticals, especially in Healthcare, consumer and public sector. Our digital solutions are also opening up new market segments and opportunities for HGS as clients embark on customer experience transformation to cater to digital natives.
Looking ahead, we are investing in driving aggressive growth for the rest of the year. While we expect a robust open enrollment season in the healthcare vertical, we are also setting up new centers and looking to hire significantly to support new client wins in the UK and Jamaica."
Hinduja Global Solutions (HGS) is engaged in business process management. HGS with its subsidiaries offer voice and non-voice based services such as contact center solutions and back office transaction processing across America, Canada, Europe, Asia and Middle East.
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